Feasibility Studies

Research and development companies should have a feasibility study detailing both the market potential and economic viability for the product or service. The feasibility study demonstrates that the company has objectively considered what will be required for success of the project and the risks involved, and that there is a real potential for success. Some of the topics to be considered involve:

Definition of the Project

Description of the project or service to be developed; the number and type of models in the product line and identification of the stage of the product development; resources (facilities, equipment, manpower and management skills) required to develop and manufacture the product or provide service; and schedule of implementation.

Background

Brief history and overview of the company, a description of the environment in which the company is operating, a review of the products and services which have been developed and/or marketed to date, description of the company business objectives, including how the project fits into its long range plans.

Assessment or Evaluation of the Product, Service or Technology

This section should be well documented and must contain a clearly stated assessment of the product, service or technology with respect to each aspect discussed including a statement by 2i^c as the author, regarding the feasibility of the product. This section should also provide complete and clear documentation of the product, service or technology, including the following topics where relevant:

• the actual costs of development of the project to date
• progress to date in the development of the product, and where the product involves the development or incorporation of new technology, an assessment as to the technical feasibility of the product including testing results obtained and any further testing and development that may be required, the expected cost and timing involved in any further testing and a statement by 2i^c indicating whether the product is technically feasible
• availability, contractual commitment and qualifications of the personnel and consultants developing the product, service or technology, in order to provide a reasonable expectation that development can be completed, supported and/or enhanced in the future
• proprietary protection (e.g., copyrights, patents), special design features and existing and potentially competitive products; and
• uniqueness of the product, service or technology or other aspects of distinctive competence that are expected to result in success.

Market Evaluation

This section will clearly indicate an assessment of each aspect discussed and a statement by 2i^c regarding the market size and market acceptance of the product, service or technology, and the proposed marketing plan. In appraising the marketability of the product, service or technology being developed, and in evaluating managements marketing plan devised for the product, service or technology, the report will address the following aspects:

• the marketplace and the market size
• pricing
• existing competitive products, services, technology and the likelihood of new competition
• market acceptance of the product, service or technology
• the related marketing experience and expertise of the project team
• the adequacy and comprehensiveness of managements marketing plan and the reasonableness of the proposed marketing expenditures.

Development Plan

The report must detail the development plans for the product for the next 12 months, or if a development plan has been prepared by management, it will summarize managements plan and include a statement by 2i^c on whether the plan is reasonable and adequate.

Financial Plan

The report will detail the forecasted revenues/expenses and capital expenditures associated with the project for the next year, the assumptions used in the preparation of the forecasts and the anticipated source of funding during the period. The forecasts for the 12 months will be set out on a monthly basis and prepared in accordance with Generally Accepted Accounting Principles defined by the Canadian Institute of Chartered Accountants. The forecasts must clearly show the working capital requirements on a cash flow basis for the period covered.

Other

A summary evaluation of the competitive strengths and weaknesses of the company is provided. Major risks are also identified, their nature disclosed and their potential impact on the financial results indicated.

Fees start at $10,000